The committee of conference on the disagreeing votes of the two branches with reference to the Senate amendment (striking out all after the enacting clause and inserting in place thereof the text of Senate document numbered 2115, amended in section 1, in line 12, striking out the words “records, information and personnel necessary to respond to the state of emergency” and inserting in place thereof the words "documents, information and personnel necessary to respond to the state of emergency; provided, however, that documents and information provided to the chairman during such state of emergency shall be subject to the exemption provided by subclause (n) of clause Twenty-sixth of section 7 of chapter 4, to the extent necessary to protect the public safety"; and in section 5, in line 58, by adding at the end thereof the following sentence: "The department shall accord protected treatment under section 5D of chapter 25 to confidential, competitively-sensitive or other proprietary information contained in an emergency response plan and shall also confirm the application of subclause (n) of clause Twenty-sixth of section 7 of chapter 4 so as not to jeopardize public safety.") of the House Bill relative to public utility companies (House, No. 4126), reports the accompanying bill (House, No. 4329).

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An Act RELATIVE TO PUBLIC UTILITY COMPANIES.

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FOR THE COMMITTEE:

On the part of the House:

On the part of the Senate:

BARRY R. FINEGOLD

MICHAEL W. MORRISSEY

ROBERT L. RICE, JR

JENNIFER L. FLANAGAN

ROBERT S. HARGRAVES

BRUCE E. TARR

The Commonwealth of Massachusetts

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In the Year Two Thousand and Nine

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An Act RELATIVE TO PUBLIC UTILITY COMPANIES.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. Chapter 25 of the General Laws is hereby amended by inserting after section 4A the following 2 sections:-

Section 4B. Upon declaration by the governor that a state of emergency exists, the governor may authorize the chairman of the department of public utilities to take such action that the chairman may consider necessary to assure public safety and welfare through the priority restoration or continuing availability of gas, electric and water utility services.Under such authority, the chairman may issue operational and management directives and order expenditures or other measures by any investor-owned utility that the chairman considers necessary to respond to the state of emergency, including but not limited to, expenditures for the deployment of personnel, equipment and other assets or property of an alternative utility to assume responsibility for the restoration of service if, in the judgment of the chairman, the affected utility is incapable of restoring service. The chairman shall have immediate access to all utility documents, information and personnel necessary to respond to the state of emergency; provided, however, that documents and information provided to the chairman during such state of emergency shall be subject to the exemption provided by subclause (n) of clause 26 of section 7 of chapter 4, to the extent necessary to protect the public safety. The chairman may temporarily suspend any department rule or regulation and implement any emergency rule, procedure or protocol that is necessary to respond to the emergency. Any orders issued by the chairman shall expire within 30 business days unless ratified by the commission prior to the 30 day expiration; provided, however, that said ratification by the commission shall prescribe an end date for each order. Expenses authorized by the chairman under this section may be recognized by the department for all purposes as proper business expenses of the affected utility or alternative utility subject to investigation and recovery through rates. The affected utility shall be required to reimburse the alternative utility for all its costs incurred within 90 days of the receipt of invoices for the cost of service. Failure of any investor-owned utility to carry out an order by the chairman authorized under this section shall be subject to investigation and a penalty of up to $1,000,000 per violation. A penalty levied by the department shall be returned to ratepayers through distribution rates. Any investor-owned utility aggrieved by an order or directive issued by the chairman under this section may request a hearing within 90 days from the date the state of emergency ends.

Section 4C. (a) As used in this section, “emergency” shall mean a situation or condition which presents a threat to the public safety and welfare of the company’s customers. An organized labor activity conducted for union recognition or as a tactic in contract negotiations shall not, of itself, constitute an emergency.

The attorney general on his own initiative, or upon petition by the department or by the city council in an affected city or by the board of selectmen in an affected town, may bring an action in superior court requesting the appointment of a receiver to oversee the operation of an investor-owned electric distribution, transmission or natural gas distribution company who serves less than 100,000 customers in the commonwealth. The court may appoint a receiver to operate the company, provided that the court finds that an emergency exists, and that the company has (a) materially violated standards for responding to emergencies, or (b) there is other compelling evidence that the company will not be able to comply with such standards without a receivership.

(b) The court may appoint as a receiver any person appearing on a list established for the purpose by the chairman and the secretary of energy and environmental affairs after the chairman and secretary consult with representatives of investor-owned electric distribution, transmission and natural gas distribution companies.

(c) The purpose of a receivership created under this section shall be to safeguard the health, safety and welfare of the company’s customers. A receiver appointed hereunder shall not take any actions or assume any responsibilities inconsistent with this purpose.

(d) No person shall impede the operation of a receivership created under this section. There shall be an automatic stay for a 120-day period subsequent to the appointment of a receiver, of any action that would interfere with the functioning of the company, including but not limited to, cancellation of insurance policies executed by the company or repossession of equipment used in the facility.

(e) Unless the court determines otherwise, a receivership created under this section shall not exceed 1 year.

(f) A receiver appointed pursuant to this section shall have access to all company utility assets and records and may manage the company’s assets in a manner which will restore or maintain an acceptable level of service. The receiver may hire, direct or manage any employee, discharge any non-union employee, order an internal management audit, expend existing company utility revenues for labor and materials and make additional expenditures essential to providing an acceptable level of service; provided, that such expenditures are funded in accordance with generally accepted utility practices. Any costs incurred by the department or receiver under this section shall be the responsibility of the company. The company may petition the court to determine the reasonableness of any expenditure by the receiver.

(g) The court shall set a reasonable compensation for the receiver that is consistent with the regulations of the department. Such compensation shall be paid from the revenues of the company.

(h) No person shall bring an action against a receiver appointed under this section without first securing leave of court. The receiver shall be deemed the beneficiary of any insurance policies held by the company relating to the liability of directors or officers of the company.

(i) The department may promulgate rules and regulations, as necessary, for the implementation of this section.

(j) Notwithstanding the foregoing, this section shall not apply to an electric or gas distribution company serving less than 100,000 customers within the commonwealth that has an affiliate in the state which serves more than 100,000 customers within the commonwealth and the affiliates perform emergency restoration jointly.

SECTION 2. Section 1E of chapter 164 of the General Laws, as appearing in the 2008 Official Edition, is hereby amended by striking out subsections (c) and (d) and inserting in place thereof the following subsection:-

(c) The department shall promulgate regulations relative to an alternative dispute resolution process for the handling of damage claims by customers in an amount under $100. The department shall establish a 60 day timeline for the resolution of all mediation claims. The department shall issue a biannual report to the joint committee on telecommunications, utilities and energy which shall include, but not be limited to, the following information: the nature of consumer claims, the number of consumer claims and the resolutions of consumer claims reviewed by the department during the previous 6 months. Said report shall be available for public review at the department.

SECTION 3. Section 1F of said chapter 164, as so appearing, is hereby amended by striking out, in line 238, the figure “$1,000,000”, and inserting in place thereof the following figure:- $5,000,000.

SECTION 4. Said chapter 164 is hereby further amended by inserting after section 1H the following 2 sections:-

Section 1I. Each investor-owned electric distribution, transmission, and natural gas distribution company shall file a report with the department by March first of each year comparing its performance during the previous calendar year to the department's service quality standards and any applicable national standards as may be adopted by the department. The department shall be authorized to levy a penalty against any distribution, transmission, or gas company which fails to meet the service quality standards in an amount up to and including the equivalent of 2.5 per cent of such company's transmission and distribution service revenues for the previous calendar year.

Section 1J. The department shall promulgate rules and regulations to establish standards of acceptable performance for emergency preparation and restoration of service for electric and gas distribution companies doing business in the commonwealth. The department shall levy a penalty not to exceed $250,000 for each violation for each day that the violation of the department’s standards persists; provided, however, that the maximum penalty shall not exceed $20,000,000 for any related series of violations. The department shall open a full investigation, upon its own initiative, or upon petition of the attorney general or by the city council in an affected city or by the board of selectmen in an affected town, regarding a violation of the department’s standards of acceptable performance to determine whether the electric or gas distribution company violated such standards; provided, however, that said petition shall be filed with the department not later than 90 days after the violation has been remedied.

SECTION 5. Said chapter 164 is hereby further amended by inserting after section 85A the following section:-

Section 85B. (a) Each electric distribution, transmission and natural gas distribution company conducting business in the commonwealth shall annually, on or before May 15, submit to the department an emergency response plan for review and approval. The emergency response plan shall be designed for the reasonably prompt restoration of service in the case of an emergency event, which is an event where widespread outages have occurred in the service area of the company due to storms or other causes beyond the control of the company. The emergency response plan shall include but not be limited to, the following:-

(1)the identification of management staff responsible for company operations during an emergency;

(2)a communications system with customers during an emergency that extends beyond normal business hours and business conditions;

(3)contact with customers who had documented their need for essential electricity for medical needs;

(4)designation of staff to communicate with local officials and relevant regulatory agencies;

(5)provisions regarding how the company will assure the safety of its employees and contractors;

(6)procedures for deploying company and mutual aid crews to work assignment areas; and

(7)identification of additional supplies and equipment needed during an emergency and the means of obtaining additional supplies and equipment.

The filing with the department shall also include a copy of all written mutual assistance agreements among utilities. The department shall accord protected treatment under section 5D of chapter 25 of confidential, competitively sensitive or other proprietary information contained in any emergency response plan and shall also confirm the application of subclause (n) of clause 26 of section 7 of chapter 4 so as not to jeopardize public safety.

(b) After review of an investor-owned electric distribution, transmission or natural gas distribution company’s emergency response plan the department may request that the company amend the plan. The department may open an investigation of the company’s plan. If, after hearings, the department finds a material deficiency in the plan, the department may order the company to make such modifications that it deems reasonably necessary to remedy the deficiency.

(c) Any investor-owned electric distribution, transmission or natural gas distribution company failing to file its emergency response plan may be fined $500 for each day during which such failure continues. The fines levied by the department shall be returned to ratepayers through distribution rates.

(d) Notwithstanding any existing power or authority, the department may open an investigation to review the performance of any investor-owned electric distribution, transmission or natural gas distribution company in restoring service during an emergency event. If, after evidentiary hearings or other investigatory proceedings, the department finds that, as a result of the failure of the company to implement its emergency response plan, the length of the outages were materially longer than they would have been but for the company’s failure, the department may deny the recovery of all, or any part of, the service restoration costs through distribution rates, commensurate with the degree and impact of the service outage.

SECTION 6. The rules and regulations required by section 1J of chapter 164 of the General Laws, inserted by section 4 of this act, shall be promulgated on or before May 17, 2010.

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